 © Copyright CDC Corporation CDC Software Corporation Investor Update Call January 8, 2010 Filed by CDC Software Corporation pursuant to Rule 425 of the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934 Subject Company: Chordiant Software Inc. Commission File No.: 001-34179 |
 © Copyright CDC Corporation 2 CDC Software Safe Harbor This communication does not constitute an offer to sell or the solicitation of an offer to
buy any securities or a solicitation of any vote or approval. In connection
with the proposed transaction, CDC Software Corporation, and/or CDC Corporation or the company, plans to file with the SEC a registration statement on Form F-4 containing a proxy statement/prospectus and other documents
regarding the proposed transaction. The definitive proxy statement/prospectus will be mailed to shareholders of Chordiant Software Inc. INVESTORS AND SECURITY HOLDERS OF CHORDIANT SOFTWARE INC. ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS CAREFULLY WHEN FILED WITH THE SEC IN
THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. Investors and security holders will be able to obtain free copies of
the registration statement and the proxy statement/prospectus, when filed, and other documents filed with the SEC by the company through the web site maintained by the SEC at www.sec.gov.
Free copies of the registration statement and the proxy statement/prospectus (when available) and other documents filed with the SEC
can also be obtained by directing a request to Monish Bahl, Senior Vice
President, Investor Relations (678) 259-8510. The company and its directors
and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding the company's directors and executive
officers is available in its Registration Statement on Form F-1/A (333-160600), which was filed with the SEC on August 4, 2009. CDC Corporation’s information can be found at www.sec.gov and on its website at www.cdccorporation.net. As of January 5, 2010, CDC Software Corporation owned 392,762 shares of Chordiant Software Inc. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. Statements in this presentation that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as the company's ability to achieve the synergies and value creation contemplated by the proposed transaction, the company’s ability to promptly and effectively integrate the businesses of Chordiant Software Inc. and the company, the timing to consummate the proposed transaction, and the diversion of management
time on transaction-related issues. For further information regarding risks
and uncertainties associated with the company’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of CDC Corporation and CDC Software Corporation’s SEC filings, including, but not limited to, its Registration Statement on Form F-1/A (333-160600), which was filed with the SEC on August 4, 2009, copies of which may be obtained by contacting the company's Investor Relations department at (678) 259-8510 or at the company’s website at www.cdcsoftware.com. All information in this communication is as of January 8, 2010. Customer examples are based upon the beliefs and expectations of CDC Software’s management. No representations or warranties are made with respect thereto. This presentation contains financial measures not prepared in accordance with U.S. GAAP. Please see the company's press release for explanations and reconciliation thereof. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or
changes in the company's expectations. Historical results are not indicative of
future performance. This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed transaction, CDC Software Corporation, and/or CDC Corporation or
the company, plans to file with the SEC a registration statement on Form F-4
containing a proxy statement/prospectus and other documents regarding the proposed transaction. The definitive proxy statement/prospectus will be mailed to shareholders of Chordiant Software Inc. INVESTORS AND SECURITY HOLDERS OF CHORDIANT SOFTWARE INC. ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS CAREFULLY WHEN FILED WITH THE SEC IN
THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. Investors and security holders will be able to obtain free copies of
the registration statement and the proxy statement/prospectus, when filed, and other documents filed with the SEC by the company through the web site maintained by the SEC at www.sec.gov.
Free copies of the registration statement and the proxy statement/prospectus (when available) and other documents filed with the SEC
can also be obtained by directing a request to Monish Bahl, Senior Vice
President, Investor Relations (678) 259-8510. The company and its directors
and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding the company's directors and executive
officers is available in its Registration Statement on Form F-1/A (333-160600), which was filed with the SEC on August 4, 2009. CDC Corporation’s information can be found at www.sec.gov and on its website at www.cdccorporation.net. As of January 5, 2010, CDC Software Corporation owned 392,762 shares of Chordiant Software Inc. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. Statements in this presentation that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as the company's ability to achieve the synergies and value creation contemplated by the proposed transaction, the company’s ability to promptly and effectively integrate the businesses of Chordiant Software Inc. and the company, the timing to consummate the proposed transaction, and the diversion of management
time on transaction-related issues. For further information regarding risks
and uncertainties associated with the company’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of CDC Corporation and CDC Software Corporation’s SEC filings, including, but not limited to, its Registration Statement on Form F-1/A (333-160600), which was filed with the SEC on August 4, 2009, copies of which may be obtained by contacting the company's Investor Relations department at (678) 259-8510 or at the company’s website at www.cdcsoftware.com. All information in this communication is as of January 8, 2010. Customer examples are based upon the beliefs and expectations of CDC Software’s management. No representations or warranties are made with respect thereto. This presentation contains financial measures not prepared in accordance with U.S. GAAP. Please see the company's press release for explanations and reconciliation thereof. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or
changes in the company's expectations. Historical results are not indicative of
future performance. |
 © Copyright CDC Corporation 3 A Good Fit - Why We Believe This Deal Makes Sense for Stakeholders We believe Chordiant is a good fit based on CDC Software’s acquisition criteria: Technology – highly complimentary, adds call center technology to CDC front office portfolio Value – Offer fair value at a premium in-line with recent acquisitions Geographic footprint – complimentary markets with minimal geographic overlap despite similar customers Back Office Integration – opportunity to eliminate redundant costs Scale – CDC SW global infrastructure adds critical mass to Chordiant to help compete in today’s environment We believe deal is accretive immediately based on our analysis. |
 © Copyright CDC Software 4 Transaction Overview • Some CDC Software executives have had working relationships with members of Chordiant’s management, including its CEO and CTO. • As of January 5, 2010, CDC SW owned 392,762 CHRD shares (or approximately 1.3% of CHRD
shares outstanding). • CDC SW is proposing to buy all the outstanding shares of CHRD at a premium of 21% over the 30 day trading average through Jan. 5, 2010, amounting to $3.46 per share. • Two options for payment: • 40% cash, 60% shares (50/50 combination of CDC SW and CDC Corp.) • 50% cash, 50% CDC SW shares • Shareholders can choose either or both of these two options, in any combination, in 1,000
share increments |
 © Copyright CDC Software 5 2009 Software M&A Premiums * Acquiror Target Announced Date Market Value ($mm) Enterprise Value ($mm) Premium to Avg Pre-Annc. Stock Price 1-Day 1-Month 3-Month Thoma Bravo AMICAS 12/24/2009 216.5 176.3 21.0% 19.5% 35.3% Technology Resource Hld. Silicon Storage Tech 11/13/2009 201.3 22.6 12.9% 1.4% -2.8% JDA Software Group i2 Technologies 11/5/2009 431.9 393.6 9.0% 9.4% 11.5% Symphony Technology MSC Software 9/17/2009 381.8 232.7 20.7% 22.4% 24.1% Ebay Gmarket 4/15/2009 1,227.0 925.5 20.2% 38.4% 54.6% Thoma Bravo Entrust 4/13/2009 113.7 89.4 20.8% 19.6% 24.0% • The average premium percentages of the six software target companies for 1- Day, 1-Month, and 3-Months are 17.4%, 18.5% and 24.5%, respectively. Software Equity Value Premiums 1-Day 1-Month 3-Month Max 21.0% 38.4% 54.6% Mean 17.4% 18.5% 24.5% Median 20.5% 19.6% 24.1% Min 9.0% 1.4% -2.8% * Based upon CDC Software’s review of publicly-available information.
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 © Copyright CDC Corporation 6 Global Snapshot Company Background $48.6 million in total revenue for Q3 2009 Non-GAAP earnings per share of $0.33 and Non-GAAP net income of $9.6 million,
exceeded Wall Street’s expectations Increase in net cash from operations: $19.2 million in Q3 2009 compared to $15.2 million in
Q2 2009 Sequential increase in maintenance revenue: $25.4 million in Q3 2009
compared to $24.8 in Q2 2009 On January 5, 2010, CDC Software pre-announced Q4 09 license results that demonstrate double-digit organic growth Provider of integrated end to end solutions: ERP, SCM and CRM applications Targeted vertical markets such as Food and Beverage, CPG Financial Services Retail, and more. Direct operations and subsidiaries in over 20 countries CDC Software – Q3 09 and Preliminary Q04 09 Financial Results |
 © Copyright CDC Corporation 7 Acquisition Experience: Experience with Public Companies – Ross and Pivotal Acquisition of Pivotal and Ross Acquisition of Pivotal and Ross • CDC acquired Ross in 2004 as a foundation for its Back Office Solutions business and has grown this segment from $45 million in revenue to over $95 million in revenue* • CDC acquired Pivotal in 2004 and has grown the Front Office business from $45 million in revenue to over $85 million in revenue* • Other tuck-in applications • CDC acquired Ross in 2004 as a foundation for its Back Office Solutions business and has grown this segment from $45 million in revenue to over $95 million in revenue* • CDC acquired Pivotal in 2004 and has grown the Front Office business from $45 million in revenue to over $85 million in revenue* • Other tuck-in applications * Estimated based on management’s analysis of historical revenue amounts, product mix
and trends. |
 © Copyright CDC Corporation 8 CDC Software: • Adjusted EBITDA and Non GAAP Net Income for prior periods are pro forma 0% 5% 10% 15% 20% 25% 30% 2007 2008 YTD 2009 Adj EBITDA as % of Rev - 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 2007 2008 YTD 2009 Net Cash from Operations ($US M) 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 2007 2008 YTD 2009 Non GAAP Net Income as % of Rev |
 © Copyright CDC Corporation 9 Market Cap: US$309 million Net Cash: US$ 62 million Market Cap: US$58 million Net Cash: US$60 million Market Cap: US$274 million Net Cash: US$ 90 million CDC Corporation: Overview NASDAQ: CDCS Enterprise Software 84% owned by CDC (98.1% controlled) IT Services 100% owned by CDC Online Games 100% owned by CDC (HKGEM: 8006) Internet and Media Portal 79% owned by CDC CDC Corp. (NASDAQ:China) |
 © Copyright CDC Corporation 10 CDC Software – Chordiant Combination • We believe Chordiant is a natural extension of CDC Front Office. • CDC SW has a good track record of acquiring sub-scale software companies of similar size, i.e. Ross and Pivotal – expects to eliminate duplicate positions and ratchet margins. • Share same verticals with many common customers: AIG, RBS, ING, Prudential, Barclays, etc. • CDC SW Front Office sales team expected to cross-sell CHRD products into our installed bases, especially in Japan, Australia, China, India, and Singapore, where
CHRD has minimal presence. • CDC SW has a good track record of cross-selling Front Office products into our
back office installed bases, ie. ERP/Supply Chain/CDC Factory. • CDC SW has an established platform that provides cost effective R&D and global
support in India/China – 75% of total R&D. • CDC SW has an excellent track record of managing costs despite a challenging economic climate. In the last 2 years, CDC SW doubled Non GAAP Net income margin to 18% despite lower revenue. • CDC SW estimates organic growth in Q4 with double digit license revenue growth as compared to average of previous 3 quarters. Talking Points - Specifics |
 © Copyright CDC Corporation 11 Why we believe CHRD should consider this proposal: Chordiant Perspective • CHRD has good customers and strong technology. • We believe CHRD is subscale. • CDC SW has exceeded Wall Street expectations since its IPO in terms of Non GAAP net income and
adjusted EBITDA, while CHRD has missed analyst expectations over the last several quarters. • As evidenced by a recent failed acquisition attempt, we believe management realizes that CHRD
needs to add more scale to compete. • We believe that CHRD investors fear this pursuit of an acquisition strategy will result in
high levels of cash outflow, while the business is simultaneously burning cash.
• CHRD business model is based on “elephant hunting” – large mega deals with long sales cycles. CDC SW has a “bread and butter” core base of business. We believe that when you marry the two, the result is highly synergistic. • Favorable consideration - mix of cash and stock. Tax structure could be favorable for holders of CHRD. • CDC SW is offering a premium of 21%, in-line with recent transactions. |
 © Copyright CDC Corporation 12 Customer Synergies – Known Joint Customers of CDC Software and Chordiant |
 © Copyright CDC Corporation 13 What some of our Common Customers have to say? • “We use Chordiant heavily as a company and I was excited to hear the news. I think this puts CDC in a strong position having best-of-breed applications for
CRM & CEM” --Leading global institutional asset management company • "Huge value to have both under one umbrella” “definitive advantage to have best of breed CEM; rounds out the product suite" --Large financial services organization • "For CDC this is good thing, to acquire more of the front office support products that insurance & investment companies need" --Large ranking financial investment firm • “We use Chordiant heavily as a company and I was excited to hear the news. I think this puts CDC in a strong position having best-of-breed applications for
CRM & CEM” --Leading global institutional asset management company • "Huge value to have both under one umbrella” “definitive advantage to have best of breed CEM; rounds out the product suite" --Large financial services organization • "For CDC this is good thing, to acquire more of the front office support products that insurance & investment companies need" --Large ranking financial investment firm |
 © Copyright CDC Corporation 14 CDC Front Office Suite – Best in Class Marketing Pivotal Sales Miller Heiman Edition Pivotal Mobile Pivotal Handheld Customer Experience Cross/Up Sell Case Management Decision Management Ecommerce SaaS eCommerce Store Front Auction Feedback Management Feedback Management Customer Self- Service Collections Manager CX Retention Customer Loyalty Sales CDC MarketFirst Pivotal eMarketing |
 © Copyright CDC Corporation 15 Principal Financial Group Customer Profile • $280.5 Billion Assets Under Management • 14,900 Employees Globally • 18.6 Million Customers Lines of business: • Asset Management • Retirements & Investments • Insurance • Health and Wellness • Banking • Could allow for unified view of the customer and key customer information to create a true 360 degree view. • Pivotal and Chordiant integration could allow business to harness some of the following: • Chordiant users - cross-sell products and services based on historical information stored in Pivotal • Pivotal users - insight into key issues surrounding the customer |
 © Copyright CDC Corporation 16 WellPoint Customer Profile • Leading US Health Benefits Company • 42,000 Employees • 35 Million Medical Members • Part of S&P 500 – WLP • Could allow for a complete end to end solution. • Little capability overlap – only true synergies between solutions • Could provide a unified application for entire customer lifecycle. |
    © Copyright CDC Corporation 17 ING Customer Profile • Multi-National Leading Financial Services Provider • Over 85 Million Private and Corporate Customers • 110,000 Employees • $226 Billion in Revenue • Could allow ING to have unified front office vendor for their business. • Possible cross-selling synergies to provide Pivotal to the Banking business and Chordiant to the Investment Management business • Could allow ING to establish and manage a Center of Excellence and drive down costs of ownership. ING Banking ING Banking ING Investment Management ING Investment Management Cross-Selling Synergies |
 © Copyright CDC Corporation 18 Large UK Retail Banking Group • Over 145,000 Employees Globally • Operations in over 50 countries • 49 Million Customers • Over 1700 UK Branches • Over 33,000 users of CDC Respond Solution Lines of business: • Retail banking • Credit cards • Corporate banking • Investment banking • Wealth management • Investment management services • Could provide complimentary solutions to improve customer engagement management and call centre throughput. • Could allow for seamless integration of sales and complaint management processes that could allow easy access to complaint history and the quick capture of complaints • Holistic view of customer could improve experience that can help reduce churn and improve selling opportunities Customer Profile CHRD Contact Center CDC Respond Quick Complaint Capture Complaint History |
 © Copyright CDC Corporation 19 Comparison of Operating Expenses * * Data based upon last three quarters of publicly available information. CDCS CHRD Revenue 100% 100% Sales & Marketing 16% 35% R&D 8% 25% G&A 12% 16% Other 2% 0% Total OpEx 39% 77% Non GAAP Earnings 18% -6% |
 © Copyright CDC Corporation 20 Summary • We believe that the transaction could help increase earnings via cost reductions, as well as improved scale and global reach. • We believe that the potential combination of solutions form a compelling front office value proposition. • We believe that the deal is immediately accretive. • Offering a premium to CHRD holders. • We believe that the transaction could help increase earnings via cost reductions, as well as improved scale and global reach. • We believe that the potential combination of solutions form a compelling front office value proposition. • We believe that the deal is immediately accretive. • Offering a premium to CHRD holders. |